When the economy expands, so does credit. And all that credit infuses new money into the economy.

People use that money to buy products. The demand for products also increases demand for the commodities that go into them.

And that’s another tailwind for commodities.

In 2004, total U.S. credit grew at 10%. Today, total credit growth is at 3.5%.

While that’s a far cry from 2004, the difference is due to the huge housing boom we had back then. Nevertheless, any time credit expands, it’s good for the overall economy.

These three conditions generally line up near the end of an economic cycle. And we’re in the “melt-up” phase—or late stages—of the current bull market.

The conditions are now ripe for another supercycle in commodities.

How to Get Exposure

We last saw the three trends above align back in 2004. Commodities boomed 300% over the next four to five years.

It’s not too late to get into this latest commodities supercycle.

One way to play this is to buy the United States Commodity Index Fund (USCI). This is my favorite way to get broad exposure to many different commodities.

Regards,

Nick Rokke, CFA
Analyst, The Palm Beach Daily

Justin’s note:Casey’s Big Speculation editor and commodities expert David Forest also thinks we’re on the verge of the next major commodity supercycle. He says the time to get involved in commodities is not when they’re already front-page news and prices have soared… It’s now.

This is the market we’ve all been waiting for… And we’re going to see some incredible moves in commodities in the next few years. To learn how you can position yourself to profit from this rare market phenomenon, click here to watch our brand-new video presentation.

Reader Mailbag

Does Mr. Tiwari really believe that governments around the world are going to let anyone else make money printing or "mining" money without them being involved? People may have made billions, but I think many poor suckers are going to lose billions!